Alliance, perhaps conscious of the mistakes of its boardroom predecessors, has passed all responsibility to WTW, hoping to attract investors who could never be rich enough to use WTW directly. Which of these policies work best in the uncertain economic future that faces the UK will perhaps become clearer over 2019, but hopefully the skills and techniques developed across the past 150 years by investment company boards will give investors a more comfortable ride than that of 2018.
The other three investment trusts in the portfolio will be regarded as riskier. None pay much in dividends, believing that well-chosen companies are best at reinvesting profits, rather than paying their shareholders. This certainly avoids taxes and improves the compounding of returns. It also reinforces the investment policy of Scottish Mortgage, which is to invest in the digital future by identifying those companies that are disrupting and destroying methods of doing business and living that have lasted for decades, and even centuries. Such creative destruction is the very essence of capitalism.
Early investors in Scottish Mortgage can no doubt now afford many luxury cars and houses. But they still have just one body, which is why the other two companies are included.
The past few years have seen incredible developments in medical science, and the next decade will see even more. Good health is one product of which we cannot have enough, and the two trusts chosen have so far been adept at satisfying this need.
